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L Brands (LB) Dips More Than Broader Markets: What You Should Know

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In the latest trading session, L Brands (LB - Free Report) closed at $65.90, marking a -1.41% move from the previous day. This change lagged the S&P 500's daily loss of 0.53%.

Coming into today, shares of the owner of Victoria's Secret, Bath & Body Works and other chain stores had gained 11.1% in the past month. In that same time, the Retail-Wholesale sector gained 1.92%, while the S&P 500 gained 5.72%.

Investors will be hoping for strength from LB as it approaches its next earnings release, which is expected to be May 19, 2021. In that report, analysts expect LB to post earnings of $0.98 per share. This would mark year-over-year growth of 198.99%. Meanwhile, our latest consensus estimate is calling for revenue of $2.9 billion, up 75.34% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $4.89 per share and revenue of $13.73 billion. These totals would mark changes of +41.33% and +15.87%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for LB. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 11.44% higher. LB is currently a Zacks Rank #1 (Strong Buy).

Valuation is also important, so investors should note that LB has a Forward P/E ratio of 13.67 right now. Its industry sports an average Forward P/E of 22.19, so we one might conclude that LB is trading at a discount comparatively.

Investors should also note that LB has a PEG ratio of 1.05 right now. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. LB's industry had an average PEG ratio of 2.77 as of yesterday's close.

The Retail - Apparel and Shoes industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 80, which puts it in the top 32% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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